ALTOS HORNOS DE MEXICO, S.A. DE C.V.
Altos Hornos De México Assures Continuity Of Operations
Friday, May 31, 2019 4:05 PM
MONCLOVA, COAHUILA / ACCESSWIRE / May 31, 2019 / Altos Hornos de México, S.A.B. de C.V., the largest integrated steel producer in Mexico ("AHMSA" or the "Company"), hereby informs certain events of the past week as detailed below:
On Monday, May 27, 2019, under instructions from the Mexican Ministry of Finance and Public Debt (SHCP) , the Mexican Financial Intelligence Unit (UIF) ordered that all AHMSA bank accounts be blocked and its funds frozen. AHMSA considers this action unprecedented, arbitrary and in violation of all its legal rights. The UIF, whose main purpose is to prevent and combat crimes related to financial operations from illicit sources, halted AHMSA's operating continuity, thus impacting shareholders, over twenty thousand employees and thousands of suppliers, clients and third-parties, that jointly form the extensive industrial channels with which the Company has business relationships. This put at risk the economic stability of the State of Coahuila as well as other regions within its area of influence.
AHMSA activated all the legal defense mechanisms in its power to safeguard and uphold its rights. The Company was not informed of the arguments for this arbitrary action, apparently attributed to "unlawful actions" allegedly undertaken by the Company (the Company denies all and any responsibility). AHMSA is seeking to clarify before the UIF, the SHCP and any other unit any misconception that could have caused this act of authority that is in violation of the minimum legal requirements.
On Tuesday, May 28, 2019, Mr. Alonso Ancira Elizondo was apprehended in Spain. The Company activated all necessary protocols in order to ensure that operations continue normally and requested the UIF to release all of the Company's bank accounts that were frozen.
At this time, AHMSA has not received any official information with regards to any specific cause for these actions; the Company considers that these actions are illegal and arbitrary, given that there has not been any evidence of any accusations, nor has there been charge brought against the company or any company official. Additionally, to date, there has been no inquiry by either agency to clarify any financial transaction by the Company or its management.
Today, Friday, May 31, 2019, some of the Company's main bank accounts have been ordered to be released, thus permitting the Company to re-initiate financial operations with providers and clients, as well as ensuring payments for salaries and wages for its personnel of over twenty thousand workers. The order of release of these funds also ensures that normal productive plant operations could continue; these had not slowed down since the restrictions to the bank accounts were imposed.
Additionally, the Company wishes to inform all holders of payment rights arising out of its suspension of payments proceeding, that these proceeds are completely guaranteed at this time as they were deposited in a separate trust created specifically for this purpose, and that AHMSA has knowledge that the UIF also ordered the release of the bank accounts related to this trust, what will allow the trust to continue with all payments.
It is important to mention that during the past few days, production in the various units of both steel plants, as well as routine shipments to clients, were carried out normally.
AHMSA will continue to update the market as new information becomes available.
Altos Hornos de México S.A.B. de C.V., the largest integrated steel producer in Mexico (based on tons of liquid steel produced), has two steel plants located in Monclova, Coahuila, and operates its own iron ore and metallurgical coal mines. Its current nominal production capacity is more than 5.5 million tons of liquid steel per year, which is then transformed into a variety of finished products. Additionally, AHMSA operates steam coal mines in Mexico. It employs over 19,000 workers in steel plants, mines and services.
This press release may contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause AHMSA's actual results to differ materially from those contemplated by the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include but are not limited to regional, national or global economic, business, market and regulatory conditions and the following: (i) AHMSA's ability to service its debt; (ii) competition and loss of market shares; (iii) changes in AHMSA's relationships with customers and suppliers; (iv) increases in raw material costs or interruptions in supply; (v) declines in, and volatility affecting, global prices of steel; (vi) the existence or termination of free trade agreements, such as the North American Free Trade Agreement and foreign import duties and tariffs; (vii) foreign currency exchange fluctuations; (viii) the inherently dangerous nature of mining; (ix) work stoppages, strikes or other labor disputes; (x) changes in Mexican economic policy, as well as currency instability; (xi) inaccuracies in AHMSA's estimates of economically recoverable coal reserves; and (xii) AHMSA's dependence on certain raw materials.
1 Secretaría de Hacienda y Crédito Público
2 Unidad de Inteligencia Financiera (UIF) was created in 2004 and is a government agency focused on detecting and preventing financial crimes.
In New York
Luis Guillermo Valdés Portales
Director of Financial Planning
Altos Hornos de México, S.A.B. de C.V.
Tel: 52 (866) 649-3366
Maria Barona / Rafael Borja
i-advize Corporate Communications, Inc.
Tel: (212) 406-3691/3693
/ [email protected]
SOURCE: Altos Hornos de México